Argentina to pay $1.5-bln gas debt in 2019

The Argentine federal government will in 2019 square USD 1.5 billion of debt from delayed subsidy payments to gas producers, Minister of Energy and Mining Juan José Aranguren said on Thursday.

“We are going to propose canceling [the debt] in installments beginning in 2019,” Minister Aranguren told Reuters at The Economist’s Argentina Summit in Buenos Aires.

The minister also said that companies would be remunerated in Argentine pesos, possibly under a scheme to avoid losses stemming from exchange rate volatility, and that the government had not yet been decided whether interest would be paid.

Gas producers operating in the country are owed hefty sums under the Gas Plan, which seeks to incentivise new gas-related E&P projects with a minimum price of USD 7.50 per million Btu of gas at the wellhead. Argentina’s partially state-owned YPF alone is owed a total of USD 780 million.

As the country strives to reduce its fiscal deficit, payments have been increasingly delayed. Minister Aranguren acknowledged last December that no payments were made for the entirety of 2017.